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Helping taxpayers to understand and meet their tax obligations is a fundamental role for HM Revenue and Customs (HMRC). It’s vitally important that HMRC helps to create a level playing field where those who properly declare their tax are not disadvantaged by those who do not.
When HMRC reviewed the game shooting industry it worked with the UK’s leading trade bodies to educate their members on the VAT implications of organised shooting to encourage wider understanding and promote voluntary compliance. The exercise revealed a growing shoot industry as part of a vibrant and wider diversification that has occurred over the last couple of decades. It also revealed that businesses have diversified to exploit new income streams but may not always be alert to the numerous associated tax implications in VAT and Direct tax streams.
Many rural businesses are doing the right thing but they face unfair competition if their neighbours are not. The indications are that tax irregularities may be widespread, not just with VAT, but also with Stamp Duty Land Tax, Capital Gains Tax, Inheritance Tax, Self Assessment, Corporation Tax and PAYE and Benefits in Kind on employees. This may not be deliberate evasion but the industry is in need of tax education in order to get things right.
HMRC has been conducting a tax project examining diversification generally and will be seeking opportunities to work with representative bodies to educate taxpayers and encourage voluntary compliance. Now is a good time for businesses to review the tax treatment of their various activities and, if in any doubt, talk to HMRC or seek professional advice where necessary.
Businesses should examine what they are doing and perform tax health checks. Talk to HM Revenue and Customs (HMRC) or seek professional advice where necessary.